The efficiency of auditors' supervision over the board of directors in public shareholding companies under the Jordanian law

Abstract

This paper discusses the role of auditors in supervising the board of directors in public shareholding companies.

The first section dealt with the powers and obligations of the auditors.

Both the companies’ law and the auditors, and accountants, law empowered auditors with sufficient authority to investigate the board of directors’ actions in running the affairs of the company.

In addition, in order to make sure that auditors are performing their duties, both laws forbid them from certain actions that may contradict with their duties.

In the second section, the civil, criminal and administrative liability was examined.

An auditor assumes contractual liability toward the company and its shareholders.

In addition, creditors and other third party persons may claim damages from auditors based on tort, provided that they prove that they have suffered loss from their actions.

The quantification of damages in both cases is based on actual loss sustained, in addition to lost profit.

An auditor may face a three - year imprisonment penalty if it was proven that he deliberately or through gross negligence presented or certified wrong information in his audit reports.

Finally, this paper has examined all relevant provisions that are related to auditors’ liability under Jordanian Laws.

Some recommendations were made.

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